Do senior citizens get higher FD interest rates?

Yes, most Indian banks offer an additional 0.50% (50 bps) interest rate to senior citizens (aged 60 and above) across major deposit tenures.

Is FD interest taxable in India?

Yes, interest earned on fixed deposits is fully taxable under 'Income from Other Sources' at your applicable income tax slab rate. Banks deduct TDS if total interest exceeds ₹40,000 in a year (₹50,000 for senior citizens).

Can I avoid TDS on bank FD interest?

If your total annual income is below the taxable threshold, you can submit Form 15G (for individuals under 60) or Form 15H (for senior citizens) to your bank at the beginning of the financial year to prevent TDS deduction.

What is the difference between cumulative and non-cumulative FDs?

In a cumulative FD, interest is reinvested quarterly and paid out along with principal at maturity. In a non-cumulative FD, interest is paid out periodically (monthly, quarterly, or annually) for regular income.

INVESTMENTSInteractive Tool

FD Calculator – Interest & Maturity Value

Calculate bank Fixed Deposit (FD) maturity value and interest earned with quarterly compounding across deposit tenures in India.

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Interactive Inputs

Total Investment Amount (Principal)

₹

₹10,000₹5 Lakh₹50,00,000

Annual Interest Rate (% p.a.)

3%12%

Tenure (Years)

Years

1 Years10 Years

Compounding Frequency

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Total Maturity Amount

₹7,16,130

Yields 7.45% effective annual return

Principal Deposited₹5,00,000

Total Interest Earned₹2,16,130

Effective Annual Yield7.45%

CompoundingQUARTERLY

Maturity Breakdown

Maturity₹7,16,130

Principal Deposited:₹5,00,000 (69.8%)

Total Interest Earned:₹2,16,130 (30.2%)

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Year-Wise FD Maturity Growth

Year	Opening Balance	Interest Earned in Year	Closing Balance
Year 1	₹5,00,000	+₹37,248	₹5,37,248
Year 2	₹5,37,248	+₹40,022	₹5,77,270
Year 3	₹5,77,270	+₹43,003	₹6,20,273
Year 4	₹6,20,273	+₹46,208	₹6,66,481
Year 5	₹6,66,481	+₹49,649	₹7,16,130

Practical Scenario

Example: ₹5 Lakh Fixed Deposit for 5 Years at 7.25%

Depositing ₹5,00,000 in a leading Indian commercial bank FD with standard quarterly compounding at 7.25% interest rate.

Input Parameters

Principal Deposited:₹5,00,000
Interest Rate:7.25% p.a.
Compounding:Quarterly
Tenure:5 Years

Calculated Results

Maturity Value:₹7,16,128
Total Interest Earned:₹2,16,128
Effective Annual Yield:7.45% p.a.

Key Takeaway: Quarterly compounding boosts the effective annual yield from the stated 7.25% to 7.45% per year.

How This Calculation Works (Mathematical Formula)

A = P × (1 + r/n)^(n × t)

Where P is Principal deposit, r is annual interest rate (in decimal), n is compounding frequency per year (4 for standard quarterly compounding in Indian commercial banks), and t is deposit tenure in years.

Frequently Asked Questions

Most Indian commercial banks calculate FD returns using quarterly compounding: A = P × (1 + r/4)^(4 × t), where P is principal, r is the annual interest rate, and t is tenure in years.

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Helpful Guides & Explanations

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Disclosure: Ankiva One provides free financial calculators and guides. When you apply for products through partner links on our website, we may receive compensation at no extra cost to you. This does not influence our objective calculations.